MercoPress. South Atlantic News Agency

Knighted billionaire faces “Ponzi-wicket” fraud charges

Sir Allen Stanford

Billionaire financier and cricket entrepreneur Sir Allen Stanford has been charged by US regulators over an alleged multi-billion dollar fraud. The Securities and Exchange Commission (SEC) filed a complaint in a Dallas Court against Sir Allen and three of his companies for “orchestrating a fraudulent, multi-billion dollar investment scheme”.

The SEC said it was alleging fraud "of a shocking magnitude" with "tentacles throughout the world". Linda Chatman Thomsen, director of enforcement at the SEC, said: "Stanford and the close circle of family and friends with whom he runs his businesses perpetuated a massive fraud based on false promises and fabricated historical return data to prey on investors." Regulators allege that Stanford International Bank, through a network of advisers, sold 8 billion US dollars worth of so-called "certificates of deposit" to investors promising "improbable and unsubstantiated" high returns. Buyers of these CDs were told these deposits were safe, it is alleged. Stanford has been placed under a temporary restraining order and his assets have been frozen. The SEC also charged Stanford's former college roommate, SIB chief financial office James Davis, and Laura Pendergest-Holt, chief investment officer of Stanford Financial Group. Also mentioned in the action was Stanford's father. The SEC also alleged SIB falsely told investors it had no "direct or indirect" exposure to disgraced financier Bernard Madoff's massive ponzi scheme. The Texas-born businessman currently holds dual citizenship with Antigua and Barbuda. He became the first American to be knighted by the Commonwealth nation in 2006. The financier was behind the million-dollar-a-man winner-takes-all Twenty20 cricket contest between England and a team of cricketing all-stars last year. The England and Wales Cricket Board said in a statement that it had "suspended" negotiations concerning a new sponsorship deal.